Testamentary Freedom
The basic rule in Ontario is that the testator (the person who makes the will) has almost complete freedom to decide who they want to be the executor of their estate, and how they want their estate distributed. Ontario does not have any over-arching Wills Variation Act (as some other places do), nor do testators have to be ‘fair’ or ‘treat their children equally’. With proper care and planning, a testator can often (but not always) ‘write a child out of their will’.
This rule of testamentary freedom is subject to a few key exceptions.
Wills & Marriage & Divorce
In the past, a will made before a marriage was automatically revoked by a subsequent marriage, unless the will was made in contemplation of the marriage (i.e. the will specifically referred to the marriage and the intention that the will remain valid after the marriage). This is no longer the case – marriage does not automatically revoke a prior will.
A will is not automatically revoked by a divorce. Instead, a will made before a divorce is read as if the ex-spouse died immediately prior to the testator’s death. This means that the ex-spouse will not be an executor or beneficiary (unless this divorce is specifically addressed in the will). It does mean, however, that the estate plan set up in the will is usually a mess.
Note that support obligations – whether spousal or child support – are a ‘debt’ and are not necessarily extinguished by death. If there is a support debt, it must be paid in full before any amount is paid to any ‘beneficiary’ of the estate.
Generally, if you get divorced, you should immediately do a new will and revoke all prior wills.
Wills and separation
New rules apply to ‘formal’ or ‘longer term’ separations.
The definition of ‘separated’ in the Succession Law Reform Act is –
- the parties had lived separate and apart at the time of death because of dissolution of the marriage for at least three years, or,
- the parties lived separate and apart at the time of death because of dissolution of the marriage and
- a Court order or arbitration award or valid separation agreement had been made with respect to their affairs dealing with the dissolution of the marriage
If spouses have been ‘separated’ (what we call a formal or long-term separation) as defined above, then a will made before the separation will be dealt with ‘as if the separated spouse pre-deceased the testator’ (the same rules as apply to divorce).
Different rules apply to
- common law spouses never formally married; and
- informal separations for married couples that do not meet the SLRA definition above.
Beneficiary designations: not changed by separation or divorce
Beneficiary designations on pensions, RRIFs, RRSPs and TFSAs are not automatically affected by separation or by divorce. They must be changed, either with the financial institution or by clear language in a new will made after separation.
Often pensions and other savings are a deceased most valuable asset. These should be addressed clearly as soon as possible after any separation or divorce.
New common law spouse – no will, no change
A new common law spouse may be entitled to receive the deceased’s pension. If so, the pension passes directly to the common law spouse and does not ‘fall into’ the deceased’s estate.
A common law spouse who is financially dependent on the deceased may have a dependent support claim.
Subject to the above, the mere fact that there is a new (even longstanding) common law spouse does not affect the rights or entitlements of a previous married spouse until there is a divorce and/or active steps by the testator. Unless there is divorce, a new will, or changes of beneficiary designations, it is quite likely that a separated but not divorced ex-spouse will have a valid claim and quite likely that a common law spouse will have no right to inherit (inheritance is different from dependent support).
Rights of spouses and ex-spouses and dependents
It is not wise to ignore your spouse, former spouse, or dependents in your will.
Your married spouse has the right, on your death to elect:
- To receive from your estate in accordance with your will (for instance, if your will gives everything to your spouse), or
- Under the Family Law Act, to receive from your estate as if you had been divorced immediately prior to your death.
In other words, if you give less in your will to your spouse than they would be entitled to in a divorce, then it is likely that they will in effect ‘challenge the will’ and make the election that permits them to receive as if you were divorced.
Note: these rights are in addition to, and separate from, any unpaid support, and conceivably, from any support obligation.
Note: a common law spouse does not have this right in Ontario. If you have no will, it is quite possible that your common law spouse will inherit nothing. Learn more here.
If you owe a duty to support a former spouse, then this duty likely forms a debt due by the estate. If it does, it must be paid before there is any estate available for distribution to beneficiaries (for instance, your new spouse or children) – “all debts must be paid before any bequests”. The precise nature of your debts and the consequences for your estate will depend on the terms of any agreement with your former spouse or Court order.
In Ontario, you have a duty to make adequate provision for certain dependents in your will, such as a dependent spouse (married or common law). If you do not, they can make a claim against the estate for support. Note that in order for someone to qualify for support, they must have been dependent on you financially prior to your death. This is a complex area of the law – if you want to reduce or eliminate what someone receives from your estate and they are dependent on you, get good legal advice.